Determinants of hidden champions: Evidence from Germany

Our explorative study analyses the factors that affect the likelihood of German companies to be a hidden champion. Based on an econometric estimation model with quantitative data from 60 hidden champions and 346 non-hidden champions, we could confirm prior research findings that specific enterprise characteristics such as research and development, international business activities and the great ambition to maximise market shares have significant positive effects on the likelihood to belong to the group of hidden champions. Companies of the service and distribution industries have lower chances to be a hidden champion compared to manufacturing enterprises. Drawing on the empirical finding that hidden champions do not place great value on the use of public promotional funds, governments are advised to apply other support measures in order to foster the development of hidden champions. The startingpoint should be the improvement of framework conditions.